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As the market volatility of 2022 persists, we want to provide you with an update on what’s driving the volatility and our thoughts on the way forward.
Although most of us know that bear markets (when prices in a market decline by more than 20%) are a normal and an inevitable part of a market cycle, it doesn't make them any more enjoyable to live through. Based on market research by Seeking Alpha, the average length of a bear market is 289 days (just under 10 months). By comparison, the average Bull market (when market prices are rising) is about 1,239 days (or 3.5 years).
Click HERE if you're interested in learning where the term Bull and Bear Markets came from.
Some context for you about this current market decline:
Did you know that the S&P 500 index (The S&P 500 Index features 500 leading U.S. publicly traded companies, with a primary emphasis on market capitalization) was down 13.3% year to date as of May 2nd? This marks the biggest four-month decline to start any year since 1939. To make matters worse, bonds are on course for their biggest loss since 1920. You can find more "uplifting" stats such as these by clicking HERE to find the Financial Post Article that I've referenced.
So where do we go from here?
Time and time again, studies show that the investors that remain calm and trust in their long term objectives will outperform those who panic, give into fear and ultimately sell their investments during a market sell off. Below you will find a link to an article titled The Benefits of Staying Invested. It includes a great chart which illustrates the common outcome for investors who sell at, or close to a bottom and try to time their re-entry. Emotion based investing often runs the risk of missing out on the best performing days of the inevitable market recovery.
Whether you're in a bull market or a bear market, it's always important to stay informed and make adjustments to your portfolio to position yourself for the "road ahead", but always keeping in mind your personal objectives and matching your unique portfolio to meet those needs.
In the spirit of staying informed, this month's newsletter includes links to some of the most insightful articles I've come across in recent weeks. I've even included a gardening reference guide to remind us of the importance of keeping our pollinators top of mind as we dust off our green thumbs.
Lastly, I'm honoured to say that the Mindful Wealth Management Blog has been named one of Canada's top 30 Mindfulness Blogs by Feedspot.
The Mindful Wealth Management Blog and these newsletters are created for you. If you would like to see specific topics in future blogs please email me with your suggestions - I would love to hear from you.
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The Benefits of Staying Invested
Investors are more likely to reach their long-term goals if they remain invested and avoid short-term decisions that may take them off course.
READ ARTICLE ➠
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Bank of Canada: Hike More Now, Less Later
Although the BoC has outpaced the Fed in tightening thus far, we believe policy rates will ultimately be lower in Canada than other developed market economies over the secular (3-5 years) time horizon. There are several reasons for this thesis. Read this article to find out more.
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Fed Rate-Tightening: Interest Rates Are Going Up
March 2022 the US Federal Reserve increased interest rates for the first time in more than three years and has indicated that they plan on increasing rates in subsequent meetings, depending on the data. Here is our take [Manulife Investment Management]
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Show Them the Money: Three- Minute Macro
Corporate profits are surging, but workers aren't really sharing in this profit boom- and that's made even worse by rising prices. Our eyes are also on inventory levels that are building, and which could be a danger in the wake of rising interest rates.
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Toronto Zoo's Pollinator Plant Guide
Now that spring is here, many of us will start tending to our gardens. The Toronto Zoo has created a great guide to help Ontarians plan a garden that is not only beautiful, but supportive to our pollinators. About 75% of flowering plants need to be pollinated so they can reproduce. That includes about 35% of the crops people harvest and eat around the world. Keep these plants in mind when designing your garden this year.
READ ARTICLE ➠
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